Multi-Industry OEM Places Military Business into a Strategic JV

The overall trajectory of Aerospace & Defense over the last 30 years has been growth

Pockets of the sector have experienced dynamics as the customer demand signal has developed, and the industrial base has evolved.  Additionally, segments of the sector have either grown within or been acquired by multi-industry firms that have had successful business in both military and commercial end markets. 

The “right answer” for diversification evolves with the market and a range of business specific factors  

Oftentimes, determining the right course of action with respect to market participation is complicated by a myriad of issues, including core strategic questions such as “which business should we be in, where is the market going over the long term, what kind of investment and capabilities will success require,” and - from a practical standpoint - “what is feasible?” 

Building clarity and confidence on the right strategic alternative

‘MultiSectorOEM’ was at a crossroads with making a decision related to its MilitaryBU. 

Renaissance developed a comprehensive market and competitive analysis in conjunction with evaluating the current business unit strategic plan.  Of particular focus was a Key Success Factors (“KSF”) evaluation of competitive positioning vis-a-vis customer requirements and competitor capabilities.  This allowed for a clear-eyed view of where investments would be needed to drive success in the segment.   

In conjunction with the market, business plan and KSF evaluation, Renaissance developed a view on Develop-Acquire-Partner options that evaluated the pathways and feasibility of investment to reposition the business.  The feasibility and attractiveness of a full divesture of the business was also assessed based on Renaissance’s evaluation of operational considerations related to a carve out and deep knowledge of the potential buyer landscape. 

Successfully Identifying and Executing a Joint Venture

By successfully raising capital and closing the acquisitions, Client gained extensive new capabilities toward its overall platform value proposition, and gained several new government, international and commercial In conjunction with a strategic alternatives analysis process that aligned Board, corporate, and business unit management teams. Criteria for the right partner included financial capacity for monetizing an equity stake and investing in the business, as well as the ability to enhance military customer relationships and growth opportunities.  ‘MultiSectorOEM’s’ view was that the right partner would grow the value of its remaining equity stake, drive growth through the supply chain agreement, and support MilitaryBU's ongoing success. 

Renaissance continued to support the client through the complex initiative of identifying and executing the formation of a joint venture which involved a combination of sell-side commercial due diligence, M&A Advisory, and operational transition capabilities. Renaissance continued its long-term strategy and M&A partnership with the new JV post-close.